PATRIOT BANK CORP.
                             High & Hanover Streets
                          Pottstown, Pennsylvania 19464
                                 (610) 323-1500
 
                                 March 19, 1999
 
Fellow Stockholders:
 
You are cordially invited to attend the annual meeting of stockholders (the
"Annual Meeting") of Patriot Bank Corp. and subsidiaries (the "Company"), which
will be held on April 22, 1999, at 2:00 p.m., Eastern Standard Time, at
Brookside, Prospect and Adams Streets, Pottstown, Pennsylvania.
 
The attached notice of the annual meeting and the proxy statement describe the
formal business to be transacted at the annual meeting. Directors and officers
of the Company, as well as a representative of KPMG LLP, the Company's
independent auditors for 1998, will be present at the Annual Meeting to respond
to any questions that our stockholders may have regarding the business to be
transacted.
 
The Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interests of the Company and
its stockholders. For the reasons set forth in the proxy statement, the Board
unanimously recommends that you vote "FOR" each of the nominees as directors
specified under Proposal 1 and "FOR" Proposal 2.
 
Please sign and return the enclosed proxy card promptly. Your cooperation is
appreciated because a majority of the common stock must be represented, either
in person or by proxy, to constitute a quorum for the conduct of business.
 
On behalf of the Board of Directors and all of the employees of the Company, we
thank you for your continued interest and support.
 
                                          Sincerely yours,
 

                                          /s/
                                          ----------------------------
                                          James B. Elliott
                                          Chairman of the Board
 

                                         /s/
                                          ----------------------------
                                          Joseph W. Major
                                          President and
                                          Chief Executive Officer

<PAGE>

                               PATRIOT BANK CORP.
                             High & Hanover Streets
                          Pottstown, Pennsylvania 19464
                                 (610) 323-1500
 
                            ------------------------
 
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 
                          To Be Held on April 22, 1999
 
                            ------------------------
 
     NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the "Annual
Meeting") of Patriot Bank Corp. (the "Company") will be held on April 22, 1999,
at 2:00 p.m., Eastern Standard Time, at Brookside, Prospect and Adams Streets,
Pottstown, Pennsylvania.
 
     The purpose of the Annual Meeting is to consider and vote upon the
following matters:
 
          1. The election of two directors for terms of three years each or
     until their successors are elected and qualified;
 
          2. The ratification of the appointment of KPMG LLP as independent
     auditors of the Company for the fiscal year ending December 31, 1999; and
 
          3. Such other matters as may properly come before the meeting and at
     any adjournments thereof, including whether or not to adjourn the meeting.
 
     The Board of Directors has established March 9, 1999, as the record date
for the determination of stockholders entitled to receive notice of and to vote
at the Annual Meeting and at any adjournments thereof. Only recordholders of the
common stock of the Company as of the close of business on such record date will
be entitled to vote at the Annual Meeting or any adjournments thereof. In the
event there are not sufficient votes for a quorum or to approve or ratify any of
the foregoing proposals at the time of the Annual Meeting, the Annual Meeting
may be adjourned in order to permit further solicitation of proxies by the
Company. A list of stockholders entitled to vote at the Annual Meeting will be
available at Patriot Bank, High & Hanover Streets, Pottstown, Pennsylvania
19464, for a period of ten days prior to the Annual Meeting and will also be
available at the Annual Meeting itself.
 
                                          By Order of the Board of Directors
 

                                          /s/
                                          ------------------------------------
                                          DIANE M. DAVIDHEISER
                                          Secretary
 
Pottstown, Pennsylvania
March 19, 1999

<PAGE>

                               PATRIOT BANK CORP.
 
                            ------------------------
 
                                 PROXY STATEMENT
                         ANNUAL MEETING OF STOCKHOLDERS
                                 APRIL 22, 1999
 
                            ------------------------
 
SOLICITATION AND VOTING OF PROXIES
 
     This proxy statement is being furnished to stockholders of Patriot Bank
Corp. (the "Company") in connection with the solicitation by the Board of
Directors ("Board of Directors" or "Board") of proxies to be used at the annual
meeting of stockholders (the "Annual Meeting"), to be held on April 22, 1999 at
2:00 p.m. at Brookside, Prospect and Adams Streets, Pottstown, Pennsylvania and
at any adjournments thereof. The 1998 Annual Report to Stockholders, including
consolidated financial statements for the fiscal year ended December 31, 1998,
accompanies this proxy statement, which is first being mailed to recordholders
on or about March 19, 1999.
 
     Regardless of the number of shares of common stock owned, it is important
that recordholders of a majority of the shares be represented by proxy or
present in person at the Annual Meeting. Stockholders are requested to vote by
completing the enclosed proxy card and returning it signed and dated in the
enclosed postage-paid envelope. Stockholders are urged to indicate their vote in
the spaces provided on the proxy card. Proxies solicited by the Board of
Directors of the Company will be voted in accordance with the directions given
therein. Where no instructions are indicated, signed proxy cards will be voted
FOR the election of the nominees for director named in this proxy statement, and
FOR the ratification of KPMG LLP as independent auditors of the Company for the
fiscal year ending December 31, 1999.
 
     Other than the matters set forth on the attached Notice of Annual Meeting
of Stockholders, the Board of Directors knows of no additional matters that will
be presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting and at any adjournments
thereof, including whether or not to adjourn the Annual Meeting.
 
     A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Secretary of the Company, by delivering to
the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting and voting in person. However, if you are a stockholder whose
shares are not registered in your own name, you will need appropriate
documentation from your recordholder to vote personally at the Annual Meeting.
 
     The cost of solicitation of proxies on behalf of management will be borne
by the Company. Proxies may also be solicited personally or by telephone by
directors, officers and other employees of the Company without additional
compensation therefor. The Company will also request persons, firms and
corporations holding shares in their names, or in the name of their nominees,
which are beneficially owned by others, to send proxy material to and obtain
proxies from such beneficial owners, and will reimburse such holders for their
reasonable expenses in doing so.
 
VOTING SECURITIES
 
     The securities which may be voted at the Annual Meeting consist of shares
of common stock of the Company ("Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Annual Meeting, except as
described below. There is no cumulative voting for the election of directors.
 
                                       1

<PAGE>

     The close of business on March 9, 1999 has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
stockholders of record entitled to notice of and to vote at the Annual Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 6,180,618 shares.
 
     As provided in the Company's Articles of Incorporation, recordholders of
Common Stock who beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote in respect of the shares
held in excess of the Limit. A person or entity is deemed to beneficially own
shares owned by an affiliate of, as well as, by persons acting in concert with,
such person or entity. The Company's Articles of Incorporation authorize the
Board of Directors to make all determinations necessary to implement and apply
the Limit, including determining whether persons or entities are acting in
concert.
 
     The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's Articles
of Incorporation) is necessary to constitute a quorum at the Annual Meeting. In
the event there are not sufficient votes for a quorum or to approve or ratify
any proposal at the time of the Annual Meeting, the Annual Meeting may be
adjourned in order to permit the further solicitation of proxies.
 
     As to the election of directors, the proxy card being provided by the Board
of Directors enables a stockholder to vote "FOR" the election of the nominees
proposed by the Board of Directors, or to "WITHHOLD" authority to vote for one
or more of the nominees being proposed. Under Pennsylvania law and the Company's
bylaws, directors are elected by a plurality of votes cast, without regard to
either (i) broker non-votes, or (ii) proxies as to which authority to vote for
one or more of the nominees being proposed is withheld.
 
     As to the approval of KPMG LLP as independent auditors of the Company and
all other matters that may properly come before the Annual Meeting, by checking
the appropriate box, you may: (i) vote "FOR" the item; (ii) vote "AGAINST" the
item; or (iii) "ABSTAIN" from voting on such item. Under the Company's bylaws,
unless otherwise required by law, all such matters shall be determined by a
majority of the votes cast, without regard to either (a) broker non-votes, or
(b) proxies marked "ABSTAIN" as to that matter.
 
     Proxies solicited hereby will be returned to the Company's transfer agent,
Registrar and Transfer Company, and will be tabulated by inspectors of election
designated by the Board of Directors, who will not be employed by, or a director
of, the Company or any of its affiliates. After the final adjournment of the
Annual Meeting, the proxies will be returned to the Company for safekeeping.
 
                                       2

<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
 
     The following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date or as disclosed in certain reports
regarding such ownership filed by such persons with the Company and with the
Securities and Exchange Commission ("SEC"), in accordance with Sections 13(d)
and 13(g) of the Securities Exchange Act of 1934, as amended ("Exchange Act").
Other than those persons listed below, the Company is not aware of any person,
as such term is defined in the Exchange Act, that owns more than 5% of the
Company's Common Stock as of the Record Date.
 
<TABLE>
<CAPTION>
                                    NAME AND ADDRESS OF        AMOUNT AND NATURE OF            PERCENT
TITLE OF CLASS                       BENEFICIAL OWNER          BENEFICIAL OWNERSHIP            OF CLASS
--------------                      -------------------        --------------------            --------
<S>                           <C>                              <C>                             <C>
Common Stock                  Patriot Bank                           542,916(1)                  8.8%
                              Employee Stock Ownership
                              Plan ("ESOP")
                              High & Hanover Streets
                              Pottstown, Pennsylvania 19464
Common Stock                  Brandes Investment                     318,008(2)                  5.1%
                              12750 High Bluff Drive
                              San Diego, CA 92130
Common Stock                  James L. Leuthe                        584,158(3)                  9.5%
                              3514 Eton Road
                              Allentown, PA 18104
</TABLE>
 
------------------
(1) Shares of Common Stock were acquired by the ESOP in the conversion. The
    Personnel Compensation/Benefits Committee of the Board of Directors
    administers the ESOP. Investors Trust Company has been appointed as the
    corporate trustee for the ESOP ("ESOP Trustee"). The ESOP Trustee, subject
    to its fiduciary duty, must vote all allocated shares held in the ESOP in
    accordance with the instructions of the participants. At March 9, 1999,
    87,681 shares had been allocated under the ESOP and 455,235 shares remain
    unallocated. With respect to unallocated shares, such unallocated shares
    will be voted by the ESOP Trustee in a manner calculated to most accurately
    reflect the instructions received from participants regarding the allocated
    stock so long as such vote is in accordance with the provisions of the
    Employee Retirement Income Security Act of 1974, as amended ("ERISA").

(2) Based upon an amendment to Schedule 13G filed on December 31, 1998.

(3) James L. Leuthe has executed an irrevocable proxy granting the Board of
    Directors the right to vote all shares of stock of the Company beneficially
    owned by him. The Company has agreed with the Federal Deposit Insurance
    Corporation that it will vote such shares "for" and "against" each matter in
    the same percentage as all other outstanding shares of stock of the Company
    are voted.
 
                    PROPOSALS TO BE VOTED ON AT THE MEETING
 
                       PROPOSAL 1. ELECTION OF DIRECTORS
 
     The Board of Directors of the Company currently consists of six (6)
directors and is divided into three classes. Each of the six members of the
Board of Directors of the Company also presently serves as a director of the
Bank. Directors are elected for staggered terms of three years each, with the
term of office of only one of the three classes of directors expiring each year.
Directors serve until their successors are elected and qualified.
 
     The two nominees proposed for election at this Annual Meeting are Richard
A. Elko and James A. Bentley, Jr. No person being nominated as a director is
being proposed for election pursuant to any agreement or understanding between
any such person and the Company.
 
     In the event that any such nominee is unable to serve or declines to serve
for any reason, it is intended that the proxies will be voted for the election
of such other person as may be designated by the present Board of Directors. The
Board of Directors has no reason to believe that any of the persons named will
be unable or unwilling to serve. Unless authority to vote for the nominee is
withheld, it is intended that the shares represented by the enclosed proxy card,
if executed and returned, will be voted FOR the election of the nominees
proposed by the Board of Directors.
 
     THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE
NOMINEES NAMED IN THIS PROXY STATEMENT.
 
                                       3

<PAGE>

INFORMATION WITH RESPECT TO THE NOMINEES AND CONTINUING DIRECTORS
 
     The following table sets forth, as of the Record Date, the names of the
nominees, continuing directors and Named Executive Officers (as defined below)
as well as their ages, a brief description of their recent business experience,
including present occupations and employment, certain directorships held by
each, the year in which each director became a director of the Bank, the year in
which their terms (or in the case of the nominees, their proposed terms) as
director of the Company expire. The table also sets forth the amount of Common
Stock and the percent thereof beneficially owned by each director and Named
Executive Officer and all directors and executive officers as a group as of the
Record Date.
 
<TABLE>
<CAPTION>
                                                                                  SHARES OF
                                                                 EXPIRATION     COMMON STOCK
NAME AND PRINCIPAL OCCUPATION                         DIRECTOR   OF TERM AS     BENEFICIALLY      PERCENT
AT PRESENT AND FOR PAST FIVE YEARS              AGE   SINCE(1)    DIRECTOR    OWNED(2)(3)(4)(5)   OF CLASS
----------------------------------              ---   --------   ----------   -----------------   --------
<S>                                             <C>   <C>        <C>          <C>                 <C>
NOMINEES

James A. Bentley, Jr.                           40      1998        2002            12,470             *
  President and Owner Bentley Graphic
  Communications, Inc. since 1989
Richard A. Elko                                 37      1999        2002            80,829          1.3%
  Executive Vice President and Chief
  Financial Officer of the Company and the
  Bank since January 1996. Prior to his
  appointment at the Company and the Bank,
  Mr. Elko was Corporate Controller at
  Sovereign Bancorp, Inc.
 
CONTINUING DIRECTORS

Larry V. Thren                                  56      1992        2001            63,994          1.0%
  Vice President of Human Resources and
  Support Services, Pottstown Memorial
  Medical Center since 1988.
James B. Elliott                                58      1990        2001            44,193             *
  Chairman of the Board since July 1998.
  President of Stratecon, Inc.
Samuel N. Landis                                74      1988        2000            90,993          1.5%
  Retired general contractor
Joseph W. Major                                 43      1990        2000           174,919          2.8%
  President and Chief Executive Officer of
  the Company since July 1998. Prior thereto
  he was President and Chief Operating
  Officer of the Company and the Bank since
  September 1995. Prior to his appointment at
  the Company and the Bank, Mr. Major was a
  partner in the law firm of Mauger & Major.
 
NAMED EXECUTIVE OFFICER WHO
IS NOT A DIRECTOR

Kevin R. Pyle                                   32        --          --            31,369             *
  Chief Credit Officer of the Bank since
  March 1996, prior thereto commercial
  lending officer for Berks County Bank
Stock Ownership of all Directors and            --        --          --           526,287(6)       8.3%
  Executive Officers as a Group (11 persons)
</TABLE>
 
------------------
* Represents less than one percent of the outstanding Common Stock.
 
                                       4

<PAGE>

(1) Includes years of service as a director of the Company's predecessor, the
    Bank.
 
(2) Each person effectively exercises sole (or shares with spouse or other
    immediate family member) voting or dispositive power as to shares reported
    herein (except as noted).
 
(3) Includes 5,426 vested shares awarded to each outside director and 27,136,
    7,200, and 1,296 vested shares awarded to Messrs. Major, Elko, and Pyle,
    respectively, under the Patriot Bank Corp. 1996 Stock-Based Incentive Plan
    (the "Incentive Plan"). Stock Awards granted under the Incentive Plan vest
    in five equal annual installments commencing on June 7, 1997, the first
    anniversary of the effective date of the stock award.
 
(4) Includes 8,568 shares subject to options granted to Mr. Elliott, 13,568
    shares subject to options granted to Messrs. Thren and Landis, and 67,844,
    40,705, and 1,800 shares subject to options granted to Messrs. Major, Elko,
    and Pyle, respectively, under the Incentive Plan that are exercisable within
    60 days.
 
(5) Does not include unvested stock awards granted under the Incentive Plan
    which the holder has the right to vote. Under the Incentive Plan, 8,142
    shares have been awarded to each outside director which have not yet vested,
    and 40,704, 10,800, and 1,944 shares have been awarded to Messrs. Major,
    Elko, and Pyle, respectively, which have not yet vested.
 
(6) Does not include a total of 89,820 unvested shares awarded under the
    Incentive Plan as to which voting may be directed.
 
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS.
 
     The Company conducts its business through meetings of the Board of
Directors and through activities of its committees. The Board of Directors of
the Company meets monthly and may have additional meetings as needed. During
fiscal 1998, the Board of Directors of the Company held 12 meetings. All of the
directors of the Company attended at least 75% of the total number of the
Company's Board meetings held and committee meetings on which such directors
served during fiscal 1998. The Board of Directors of the Company maintains
committees, the nature and composition of which are described below:
 
     Audit Committee.  The Audit Committee of the Company consists of Messrs.
Elliott, Bentley, Landis, and Thren who are outside directors. The Audit
Committee is responsible for reporting to the Board on the general financial
condition of the Company and the results of the annual audit, and is responsible
for ensuring that the Company's activities are being conducted in accordance
with applicable laws and regulations. The Audit Committee met four times in
fiscal 1998.
 
     Nominating Committee.  The Company's Nominating Committee for the 1999
Annual Meeting consists of the entire Board of Directors. The committee
considers and recommends the nominees for director to stand for election at the
Company's annual meeting of shareholders. The Company's Articles of
Incorporation and bylaws provide for stockholder nominations of directors. These
provisions require such nominations to be made pursuant to timely notice in
writing to the Secretary of the Company. The shareholder's notice of nomination
must contain all information relating to the nominee which is required to be
disclosed by the Company's bylaws and by the Exchange Act. The Nominating
Committee met on January 21, 1999.
 
     Compensation Committee.  The Personnel Compensation/Benefits Committee of
the Company (the "Compensation Committee") consists of Messrs. Thren, Landis,
Elliott, and Bentley. The Compensation Committee meets to establish compensation
and benefits for the executive officers and to review the incentive compensation
programs when necessary. The Compensation Committee is also responsible for
establishing certain guidelines and limits for compensation for other salaried
officers and employees of the Company. The Compensation Committee met 2 times in
fiscal 1998.
 
     Executive Committee.  The Executive Committee of the Company consists of
Messrs. Elliott, Major, Landis, Bentley and Thren. The Executive Committee is
responsible for conducting the business of the Company in the absence of the
entire Board. The Executive Committee met 9 times in 1998.
 
     Investment Committee.  The Investment Committee of the Company consists of
Messrs. Elliott, Major, Elko, Bentley, and Pyle and Robert G. Philips and
Deborah L. Gibson, who are employees of the Bank. The Investment Committee is
responsible for oversight and direction of the Company's
 
                                       5

<PAGE>

purchases of securities and the funding of such purchases. The Investment
Committee met 4 times in 1998.
 
     Mergers and Acquisitions Committee.  The Mergers and Acquisitions Committee
consists of the entire Board of Directors. The Mergers and Acquisitions
Committee is responsible for providing guidance and direction for the
consideration of potential merger and acquisition opportunities. The Mergers and
Acquisitions Committee met 2 times in 1998.
 
     Legal Coordinating Committee.  The Legal Coordinating Committee consists of
Messrs. Thren, Elliott, Landis, and Bentley. The Legal Coordinating Committee is
responsible for oversight and direction in dealing with actual and potential
legal issues, including pending and threatened claims against the Company or the
Bank. The Legal Coordinating Committee met 2 times in 1998.
 
DIRECTORS' COMPENSATION
 
     Directors' Fees.  Nonemployee directors are currently paid annual retainers
ranging from $13,000 to $16,000, plus an additional fee ranging from $2,000 to
$6,000 to the chairman of certain committees. James B. Elliott receives an
additional fee of $15,000 as Chairman of the Board.
 
     Incentive Plan.  On June 7, 1996, stockholders approved the Patriot Bank
Corp 1996 Stock-Based Incentive Plan, under which all directors who are not also
employees of the Company are eligible to receive stock awards and options to
purchase Common Stock. Under the Incentive Plan, each outside director was
granted non-statutory options to purchase 33,921 shares of common stock at an
exercise price of $7.184, which was the fair market value of shares on the
effective date of the grant, as adjusted for subsequent stock splits and stock
dividends. Options become exercisable in five (5) equal annual installments
commencing one year from the effective date of the grant.
 
EXECUTIVE COMPENSATION
 
     The report of the Compensation Committee and the stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act,
except as to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
 
     Compensation Committee Report on Executive Compensation.  Under rules
established by the Securities and Exchange Commission ("SEC"), the Company is
required to provide certain data and information in regard to the compensation
and benefits provided to the Company's Chief Executive Officer and other
executive officers of the Company. The disclosure requirements for the Chief
Executive Officer and other executive officers include the use of tables and a
report explaining the rationale and considerations that led to fundamental
compensation decisions affecting those individuals. In fulfillment of this
requirement, the Compensation Committee (the "Committee"), at the direction of
the Board of Directors, has prepared the following report for inclusion in this
proxy statement.
 
     Compensation Policies.  The Compensation Committee of the Board has
established a policy for executive compensation, taking into account both
subjective performance criteria and certain specified objective performance
measures. The purpose of the policy is to: (i) provide compensation
opportunities which are competitive with other financial services companies;
(ii) support the Company's goal setting and strategic planning process; (iii)
motivate the executive management of the Company to achieve profit and other key
goals of the institution, including but not limited to the Company's commitment
to the communities it serves, to its employees, customers and investors; (iv)
motivate the executive management to operate the Company in a safe and sound
manner, and in compliance with all pertinent governmental and regulatory
requirements; and (v) minimize potential overhead by designating a portion of
the annual compensation of executives as variable rather than fixed.
 
     During the course of 1998, the Company took into account a variety of
objective and subjective criteria in evaluating the performance of the executive
management of the Company. The Committee assessed in detail the various
challenges facing the Company, both from a historical capital and operational
standpoint, and the significant competitive pressures within the Company's
trading areas.
 
                                       6

<PAGE>

In the course of this assessment of competitive salary ranges among other
similarly situated companies, it was noted that competitive executive
compensation packages vary in relationship to these various subjective and
objective factors. A variety of resources were utilized which provided peer data
regarding executive compensation and financial performance of the company, which
included but was not limited to the "SNL Executive Compensation Review 1998" for
both Commercial Banks and Thrifts, assessments which review executive
compensation and company performance for publicly traded banks and thrifts.
Comparisons were made with institutions located within Southeastern
Pennsylvania, the Middle Atlantic trading area, and relative to national
averages. The peer groups considered in these analyses are not necessarily
comprised of the same institutions used in the peer group for the stock
performance graph. Additionally, the Company took into account executive
compensation plans of other local nonbanking companies and institutions.
 
     In establishing an Executive Compensation Plan for 1998, the Executive
Committee of the institution established certain specific objectives for
executive management, which included the creation and execution of a strategic
business plan, identifying and completing acquisition opportunities,
strengthening of senior management, and reaching certain financial goals based
on asset size, earnings per share, net income, return on assets and return on
equity.
 
     Additionally, the Company utilized a number of subjective elements as part
of the decision making process regarding executive compensation. The individual
skills and talents of the executive managers of the Company, including but not
limited to experience, leadership ability, planning and organizational skills,
administrative talent, vision for the future, and work ethic were given
consideration in establishing executive compensation.
 
     As detailed in its Mergers and Acquisitions Plan, the Company recognizes
the importance of identifying, structuring, negotiating, closing and integrating
strategic mergers and acquisitions. The Company's Board of Directors believes it
prudent to award special incentive compensation to individuals who significantly
participate in the mergers and acquisitions process. Incentives will generally
be paid upon completion of a transaction and eligible participants, as
determined by the Board of Directors, will include members of the Board of
Directors, Executive and Senior Management and other team members. All
transactions must adhere to the Company's acquisition philosophy as described in
the Mergers and Acquisitions Plan.
 
     Because of the complexity and varying nature of any particular transaction,
the Company's Board of Directors has elected to use a subjective process for
determining the amount of awards. Upon completion of a transaction, the Chief
Executive Officer will prepare a recommendation that will be submitted to the
Compensation Committee. The recommendation will detail the participating
individuals, the amounts to be awarded and the subjective factors considered.
 
     Compensation of the Chief Executive Officer and President.  During the
course of 1998, Mr. Major, as President and Chief Executive Officer,
satisfactorily accomplished all of the objective performance criteria of the
institution, and addressed a number of other challenges facing the Company. In
addition, the Company showed growth in asset size and earnings, continued to
report asset quality superior to the various peer groups considered, and
completed the acquisition of Keystone Financial Leasing Corporation and entered
into an agreement to acquire First Lehigh Corporation. Consistent with these
various objective and subjective measures, the Compensation Committee increased
Mr. Major's salary to $210,000 a year, and awarded a year-end bonus of $153,000.
 
     The Compensation Committee specifically noted that the bonus elements of
compensation were partially subjective in nature, and in-part based upon
satisfactory accomplishment of the objective requirements of the Company in
1998. It furthermore concluded that the payment of this compensation package was
necessary in order to meet the aforestated policies of the Company and to
maintain the continuity and high performance of management. Based on the
aforementioned surveys, total compensation to Mr. Major was in the mid range of
other institutions of similar asset size. Mr. Major has an employment contract
(see "Employment Contracts").
 
                           THE COMPENSATION COMMITTEE
 
                     Larry V. Thren         James A. Bentley, Jr.
                     Samuel N. Landis       James B. Elliott
 
                                       7

<PAGE>

     Stock Performance Graph. The following graph shows a comparison of total
stockholder return on the Company's Common Stock, based on the market price of
the Common Stock, with the cumulative total return of companies on the Nasdaq
Stock Market (U.S.) Index, the Media General Index for Savings Institutions, and
the NASDAQ Banking Index for the period beginning on December 4, 1995, the day
the Company's Common Stock began trading, through December 31, 1998. The graph
was derived from a limited period of time, and, as a result, may not be
indicative of possible future performance of the Company's Common Stock. The
data was supplied by Media General Financial Services.
 

                                   [GRAPHIC]


In the printed version of the document, a line graph appears which depicts the
following plot points:



     Comparison of Cumulative Total Returns for Patriot Bank Corp. Common
Stock, the Nasdaq Stock Market Index, the MG Index for Savings Institutions and
the NASDAQ Banking Index.
 
                                    SUMMARY
 
<TABLE>
<CAPTION>
COMPANY                                        12/4/95   12/31/95   12/31/96   12/31/97   12/31/98
-------                                        -------   --------   --------   --------   --------
<S>                                            <C>       <C>        <C>        <C>        <C>
Patriot Bank Corp............................  100.00     128.60     165.85     319.96     225.67
Broad Market (NASDAQ Stock Market)...........  100.00      99.63     120.46     147.77     207.72
Industry Index (Media General)...............  100.00     101.94     133.04     223.69     196.10
Industry Index (NASDAQ Banking Index)........  100.00     148.93     196.62     332.17     326.14
</TABLE>
 
     Notes:
 
        A. The lines represent annual index levels derived from compounded daily
     returns that include all dividends.
 
        B. The indexes are reweighed daily, using the market capitalization on
     the previous trading day.
 
        C. If the fiscal year-end is not a trading day, the preceding trading
     day is used.
 
        D. The index level for all the series was set to $100.00 on 12/4/95, the
     date on which the Company's stock was first publicly traded.
 
                                       8

<PAGE>

     Summary Compensation Table.  The following table shows, for the years ended
December 31, 1998, 1997 and 1996, the cash compensation paid by the Company, as
well as certain other compensation paid or accrued for those years, to the
President and Chief Executive Officer and the Executive Vice President and Chief
Financial Officer of the Company, and to the Chief Credit Officer of the Bank
for 1998 ("Named Executive Officers").
 
<TABLE>
<CAPTION>
                                                                                        LONG TERM COMPENSATION
                                                                            ----------------------------------------------
                                              ANNUAL COMPENSATION                  AWARDS                  PAYOUTS
                                       ----------------------------------   ---------------------   ----------------------
                                                                OTHER       RESTRICTED
                                                                ANNUAL        STOCK                  LTIP      ALL OTHER
                                        SALARY     BONUS     COMPENSATION     AWARDS     OPTIONS    PAYOUTS   COMPENSATION
NAME AND PRINCIPAL POSITION(1)  YEAR    ($)(2)      ($)         ($)(3)        ($)(4)      (#)(5)    ($)(6)       ($)(7)
------------------------------  ----   --------   --------   ------------   ----------   --------   -------   ------------
<S>                             <C>    <C>        <C>        <C>            <C>          <C>        <C>       <C>
Joseph W. Major                 1998   $210,000   $153,090        --               --          --     --        $ 25,190
  President, Chief Executive    1997   $147,788   $ 79,047        --               --          --     --        $ 43,014
  Officer and Director          1996   $105,385   $ 82,696        --         $487,614    $113,074     --        $ 22,226
 
Richard A. Elko                 1998   $123,375   $ 97,603        --               --          --     --        $ 20,265
  Executive Vice President      1997   $110,000   $ 55,649        --               --          --     --        $ 17,472
  and Chief Financial Officer   1996   $ 95,457   $ 52,218        --         $129,375    $ 67,843     --              --
 
Kevin R. Pyle                   1998   $ 75,000   $ 27,338        --               --          --     --        $ 19,210
  Chief Credit Officer          1997   $ 64,859   $ 11,134        --               --          --     --        $ 17,086
                                1996   $ 35,783   $  9,943        --         $ 41,916    $  3,000     --              --
 
Gary N. Gieringer               1998   $168,000   $ 40,000        --               --          --     --        $986,053(8)
                                1997   $208,308   $ 67,298        --               --          --     --        $ 56,876
                                1996   $165,539   $ 72,436        --         $487,614    $113,074     --        $ 26,554
</TABLE>
 
------------------
(1) Mr. Gieringer served as President, Chief Executive Officer and Director of
    the Bank from 1987 until August 1995. In August 1995, Mr. Gieringer was
    appointed as Chairman of the Board and Chief Executive Officer. Effective
    June 30, 1998, Mr. Gieringer resigned as an officer and director of the
    Company and the Bank due to health reasons. Mr. Major was appointed as
    President and Chief Operating Officer in August 1995. Upon Mr. Gieringer's
    resignation, Mr. Major was appointed as Chief Executive Officer of the
    Company. Mr. Elko was appointed as Executive Vice President and Chief
    Financial Officer in January 1996. Mr. Pyle was appointed Chief Credit
    Officer of Patriot Bank in March 1996.
 
(2) Includes compensation deferred at the election of Messrs. Gieringer, Major,
    Elko, and Pyle through the Company's 401(k) Plan.
 
(3) There were no (a) perquisites over the lesser of $50,000 or 10% of the
    individual's total salary and bonus for the last year, (b) payments of
    above-market preferential earnings on deferred compensation, (c) payments of
    earnings with respect to long-term incentive plans prior to settlement or
    maturation, (d) tax payment reimbursements, or (e) preferential discounts on
    stock.
 
(4) Pursuant to the Incentive Plan, Messrs. Gieringer, Major, Elko, and Pyle
    were awarded 67,842, 67,842, 18,000, and 3,240 shares (as adjusted by
    subsequent stock dividends and stock splits) of Common Stock, respectively,
    in fiscal 1996 which had a market value on June 7, 1996, the date of grant,
    of $487,614, $487,614, $129,375, and $41,916. Stock Awards granted under the
    Incentive Plan vest in five equal annual installments on each anniversary of
    the effective date of the stock award. As of December 31, 1998, the market
    value of the 67,842, 67,842, 18,000 and 3,240 shares was $797,144, $797,144,
    $211,500, and $38,070, respectively.
 
(5) Includes shares subject to options granted to Messrs. Gieringer, Major,
    Elko, and Pyle under the Stock Option Plan. All options granted under the
    Incentive Plan become exercisable in five equal annual installments on each
    anniversary of the effective date of the grant.
 
(6) For 1998, 1997, and 1996, the Company had no long-term incentive plans in
    existence. Accordingly, there were no payments or awards under any long-term
    incentive plan.
 
(7) Includes 1,365, 1,365, 896, and 1,365 shares allocated to Messrs. Major,
    Elko, Pyle, and Gieringer, respectively, for fiscal 1998 pursuant to the
    ESOP with a market value of $13,650, $13,650, $8,960, and $13,650,
    respectively. Includes $11,540, $6,615, $11,403 and $5,560 in matching and
    discretionary contributions by the Company to the Company's 401(k) plan
    during 1998 for Messrs. Major, Elko Gieringer and Pyle, respectively.
    Includes 2,560, 1,900, 637, and 751 shares allocated to Messrs. Gieringer,
    Major, Elko, and Pyle, respectively, for fiscal 1997 pursuant to the ESOP
    with a market value of $45,326, $33,639, $11,284, and $13,317, respectively,
    and $11,550, $9,375, $6,188 and $3,769 in matching and discretionary
    contributions by the Company to the Company's 401(k) plan during 1997 for
    Messrs. Gieringer, Major, Elko, and Pyle, respectively. Includes allocations
    of 1,949 shares to Mr. Gieringer ($21,924 market value) and 1,906 shares to
    Mr. Major ($21,438 market value) for fiscal 1996 pursuant to the ESOP and
    matching and discretionary contributions by the Company to its 401(k) plan
    for Messrs. Gieringer and Major of $4,620 and $788, respectively, for 1996.
 
(8) Mr. Gieringer received a lump sum payment of $961,000 upon his resignation
    in satisfaction of the Company's obligations under his employment agreement.
 
                                       9

<PAGE>

EMPLOYMENT AGREEMENTS
 
     The Bank and the Company have entered into employment agreements with
Messrs. Major and Elko, (individually, the "Executive"). These employment
agreements are intended to ensure that the Bank and the Company will be able to
maintain a stable and competent management base. The continued success of the
Bank and the Company depends to a significant degree on the skills and
competence of Messrs. Major and Elko.
 
     The employment agreements provide for a five-year term for Messrs. Major
and Elko. The Bank employment agreements provide that, commencing on the first
anniversary date and continuing each anniversary date thereafter, the Board of
Directors may extend the agreement for an additional year so that the remaining
term shall be five years, unless written notice of non-renewal is given by the
Board of Directors after conducting a performance evaluation of the Executive.
The terms of the Company employment agreements shall be extended on a daily
basis unless written notice of non-renewal is given by the Board of the Company.
The agreements provide that the Executive's base salary will be reviewed
annually. The current base salaries for Messrs. Major and Elko are $210,000 and
$123,375, respectively. In addition to the base salary, the agreements provide
for, among other things, participation in stock benefits plans and other fringe
benefits applicable to executive personnel. The agreements provide for
termination by the Bank or the Company for cause as defined in the agreements at
any time. In the event the Bank or the Company chooses to terminate the
Executive's employment for reasons other than for cause, or in the event of the
Executive's resignation from the Bank and the Company upon: (i) failure to
re-elect the Executive to his current offices; (ii) a material change in the
Executive's functions, duties or responsibilities; (iii) a relocation of the
Executive's principal place of employment by more than 20 miles; (iv) a material
reduction in the benefits and perquisites provided to the Executive; (v)
liquidation or dissolution of the Bank or the Company; or (vi) a breach of the
agreement by the Bank or the Company, the Executive or, in the event of death,
his beneficiary would be entitled to receive an amount equal to the remaining
base salary payments due to the Executive and the contributions that would have
been made on the Executive's behalf to any employee benefit plans of the Bank or
the Company during the remaining term of the agreement. The Bank and the Company
would also continue and pay for the Executive's life, health and disability
coverage for the remaining term of the Agreement.
 
     Under the agreements, if voluntary or involuntary termination follows a
change in control of the Bank or the Company, the Executive or, in the event of
the Executive's death, his beneficiary, would be entitled to a severance payment
equal to the greater of: (i) the payments due for the remaining term of the
agreement; or (ii) five times the average of the five preceding taxable years'
annual compensation. The Bank and the Company would also continue the
Executive's life, health, and disability coverage for thirty-six months.
Notwithstanding that both agreements provide for a severance payment in the
event of a change in control, the Executive would only be entitled to receive a
severance payment under one agreement. Based solely on the Compensation reported
in the Summary Compensation Table for 1998 and excluding any benefits under any
employee plan which may be payable, following a change in control and
termination of employment Messrs. Major and Elko would receive approximately
$1,296,677 and $890,503, respectively, in severance payments in addition to
other non-cash benefits provided for under the agreements.
 
     Payments under the agreements in the event of a change in control may
constitute some portion of an excess parachute payment under Section 280G of the
Internal Revenue Code (the "Code") for executive officers, resulting in the
imposition of an excise tax on the recipient and denial of the deduction for
such excess amounts to the Company and the Bank. Under the agreements the
Company and the Bank have agreed to pay to the Executive such additional amount,
if any, as is necessary, after the deduction of any applicable taxes, to pay any
such excise tax imposed on the Executive.
 
     Payments to the Executive under the Bank's agreement will be guaranteed by
the Company in the event that payments or benefits are not paid by the Bank.
Payment under the Company's agreement would be made by the Company. All
reasonable costs and legal fees paid or incurred by the Executive pursuant to
any dispute or question of interpretation relating to the Agreements shall be
paid by the
 
                                       10

<PAGE>

Bank or Company, respectively, if the Executive is successful pursuant to a
legal judgment, arbitration or settlement. The employment agreements also
provide that the Bank and Company shall indemnify the Executive to the fullest
extent allowable under federal and Delaware law, respectively.
 
     The Bank has entered into an employment agreement with Mr. Pyle having a
term of three years (the "Employment Agreement"). The Employment Agreement
provides that, commencing on the first anniversary date and continuing on each
anniversary date thereafter, the disinterested members of the Board of Directors
of the Bank may extend the Employment Agreement for an additional year so that
the remaining term shall be three years, unless written notice of nonrenewal is
given by the Board of Directors after conducting a performance evaluation of Mr.
Pyle. The current base salary for Mr. Pyle is $75,000. In addition to the base
salary, the Employment Agreement provides for, among other things, participation
in stock benefit plans and other fringe benefits applicable to executive
personnel. The Employment Agreement provides for termination by the Bank for
cause as defined in the Employment Agreement at any time. In the event the Bank
chooses to terminate Mr. Pyle's employment for reasons other than for cause, or
in the event of his resignation from the Bank upon: (i) failure to reelect him
to his current offices; (ii) material change in his functions, duties or
responsibilities; (iii) a relocation of his principal place of employment by
more than 20 miles; (iv) a material reduction in the benefits and perquisites
provided to him; (v) liquidation or dissolution of the Bank or the Company; or
(vi) a breach of the Employment Agreement by the Bank or the refusal of the Bank
to extend the term of the Employment Agreement, Mr. Pyle, or his beneficiary in
the event of his death, would be entitled to receive an amount equal to the
greater of (a) the remaining base salary payments due to him or (b) three times
his average annual compensation for the five most recent years that he has been
employed by the Bank. The Bank would also continue to pay for his life, health
and disability coverage for the three years following the date of termination.
 
     Under the Employment Agreement, upon an involuntary or voluntary
termination of Mr. Pyle's employment following a change in control of the Bank
or the Company, Mr. Pyle, or his beneficiary in the event of his death, would be
entitled to a severance payment equal to the greater of (i) the payments due for
the remaining term of the Employment Agreement; or (ii) three times the average
of the five preceding years' annual compensation. The Bank would also continue
his life, health and disability coverage for thirty-six (36) months. Any amounts
payable under the Employment Agreement resulting from termination of employment
following a change in control would be reduced to the extent necessary to avoid
such payments constituting an excess parachute payment under Section 280G of the
Code.
 
     The Company has entered into an employment with Mr. Gieringer having a term
of five years. The employment agreement provides for a base salary of $100,000.
In addition to the base salary, the employment agreement provides for
participation by Mr. Gieringer in employee benefit plans generally provided to
permanent full time employees of the Company, but the Company is not required to
include Mr. Gieringer in any bonus plan, stock option plan or similar plan
maintained for the benefit of senior executives of the Company. Mr. Gieringer is
provided with, at his option, an automobile expense allowance or the use of a
recent model automobile. Mr. Gieringer is to serve as a special senior advisor
to the Company, and render such advisory and related services as may be
reasonably requested from time to time by the Chairman of the Board or its
designee. Mr. Gieringer is not required to devote more than twenty (20) hours
per week to such duties.
 
     The employment agreement provides the Company may terminate Mr. Gieringer's
employment at any time "for cause" as defined in the employment agreement. In
the event the Company chooses to terminate Mr. Gieringer's employment for
reasons other than for cause or in the event of his resignation from the Company
upon: (i) failure to retain him as a special senior advisor to the Company, (ii)
a material change in his functions, duties or responsibilities, (iii) a
relocation of his principal place of employment by more than 20 miles, (iv) a
liquidation or dissolution of the Company, or (v) a breach of the employment
agreement by the Company, or in the event Mr. Gieringer resigns or is terminated
after a change in control of the Company, Mr. Gieringer, or his beneficiary in
the event of his death, would be entitled to continue to receive the remaining
payments during the remaining unexpired term of the employment agreement and an
amount equal to the annual contributions that
 
                                       11

<PAGE>

would have been made on his behalf to any employee pension benefit plans of the
Company during the remaining term of the employment agreement. The Company would
also continue to pay for his life, health and disability coverage for the
remaining term of the employment agreement.
 
     Incentive Plan.  On June 7, 1996, the stockholders approved the Patriot
Bank Corp. 1996 Stock-Based Incentive Plan ("Incentive Plan") under which all
employees of the Company are eligible to receive awards. The Company maintains
the Incentive Plan which provides discretionary awards to officers and key
employees as determined by a committee of non-employee directors. No options
were granted under the Incentive Plan to the Named Executive Officers for fiscal
1998.
 
     The following table provides certain information with respect to the number
of shares of Common Stock represented by outstanding options held by the Named
Executive Officers at December 31, 1998. Also reported are the values for
"in-the-money" options which represent the positive spread between the exercise
price of any such options and the closing sale price of the Common Stock at
December 31, 1998.
 
                       FISCAL YEAR-END OPTION/SAR VALUES
 
<TABLE>
<CAPTION>
                                      NUMBER OF SECURITIES UNDERLYING                VALUE OF UNEXERCISED
                                          UNEXERCISED OPTIONS/SARS                 IN-THE-MONEY OPTION/SARS
                                           AT FISCAL YEAR END(#)                    AT FISCAL YEAR END($)
                                     ----------------------------------       ----------------------------------
NAME                                 EXERCISABLE       UNEXERCISABLE(1)       EXERCISABLE       UNEXERCISABLE(2)
----                                 -----------       ----------------       -----------       ----------------
<S>                                  <C>               <C>                    <C>               <C>
Gary N. Gieringer.............         67,844              101,766             $309,766             $464,644
Joseph W. Major...............         67,844              101,766             $309,766             $464,644
Richard A. Elko...............         40,706               61,059             $185,864             $278,795
Kevin R. Pyle.................          1,800                2,700             $  8,219             $ 12,328
</TABLE>
 
------------------
 
(1) The options in this table have an exercise price of $7.184 and become
    exercisable at an annual rate of 20% beginning June 7, 1997. The options
    will expire ten (10) years from the date of grant.
 
(2) Based on market value of the underlying stock at the fiscal year end, minus
    the exercise price. The market price on December 31, 1998 was $11.75.
 
     Supplemental Retirement Plan.  The Company maintains a non-qualified
Supplemental Retirement Plan for the benefit of certain executive officers and
directors. The Supplemental Retirement Plan ("SRP") has been adopted by the
Company to provide supplemental retirement benefits to selected executives and
directors of the Company. Benefits under the SRP vest on a seven year schedule
subject to acceleration upon a change in control. The SRP provides a defined
benefit payable in fifteen annual installments of an amount which is determined
at the discretion of the Board. The participants under the SRP as determined by
the Personnel Compensation/Benefits Committee are Messrs. Major, Elliott and
Thren. The SRP provides for an early start to payment of the installments in the
event of disability, death prior to retirement, retirement or a change in
control. The SRP is unfunded for purposes of its tax treatment, however, the
Company has entered into certain life insurance contracts, the proceeds of which
could be used to fund the SRP in the future.
 
TRANSACTIONS WITH CERTAIN RELATED PERSONS
 
     The Company's current policy provides that all loans made by the Company to
its directors and officers are made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons and do not
involve more than the normal risk of collectibility or present other unfavorable
features.
 
                                       12

<PAGE>

        PROPOSAL 2.  RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
 
     The Company's independent auditors for the fiscal year ended December 31,
1998 were KPMG LLP. The Company's Board of Directors has appointed KPMG LLP as
independent auditors for the Company for the year ending December 31, 1999,
subject to ratification of such appointment by the shareholders.
 
     Representatives of KPMG LLP will be present at the Annual Meeting. They
will be given an opportunity to make a statement if they desire to do so and
will be available to respond to appropriate questions from stockholders present
at the Annual Meeting.
 
     KPMG LLP was engaged on February 26, 1998 as the Company's independent
auditors for the year ending December 31, 1998. The Company's Audit Committee
selected KPMG LLP after interviewing several independent certified public
accounting firms. The Company did not consult with KPMG LLP on any matter during
the Company's two most recent fiscal years.
 
     The Company did not have any disagreements with the Company's former
accountants on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure during the Company's last
two fiscal years or any subsequent interim period. The prior accountant's
reports on the Company's financial statements for the years ended December 31,
1996 and 1997 did not contain an adverse opinion or a disclaimer of opinion, nor
were such reports qualified or modified as to uncertainty, audit scope, or
accounting principles. The Company's independent auditors for the fiscal year
ended December 31, 1997 were Grant Thornton LLP.
 
     Unless marked to the contrary, the shares represented by the enclosed proxy
card will be voted FOR ratification of the appointment of KPMG LLP as the
independent auditors of the Company.
 
     THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
 
                                       13

<PAGE>

                             ADDITIONAL INFORMATION
 
SHAREHOLDER PROPOSALS
 
     To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 2000 Annual Meeting of Stockholders, a stockholder
proposal must be received by the Secretary of the Company at the address set
forth on the Notice of Annual Meeting of Stockholders not later than November
20, 1999. Any such proposal will be subject to 17 C.F.R. ss.240.14a-8 of the
Rules and Regulations under the Exchange Act. Notice of Business to be Conducted
at an Annual Meeting
 
     The bylaws of the Company provide an advance notice procedure for a
stockholder to properly bring business before an Annual Meeting. The stockholder
must give written advance notice to the Secretary of the Company not less than
ninety (90) days before the date originally fixed for such meeting; provided,
however, that in the event that less than twenty-one (21) days notice of the
date of the meeting is given or made to shareholders, notice by the stockholder
to be timely must be received not later than the close of business on the
seventh day following the date on which the Company's notice to stockholders of
the annual meeting date was mailed. Nominations for directors by shareholders
must be received by the Secretary of the Company not later than the close of
business on the 90th day preceding the date of the annual meeting. In the case
of nominations to the Board of Directors, certain information regarding the
nominee must be provided. Nothing in this paragraph shall be deemed to require
the Company to include in its proxy statement or the proxy relating to an annual
meeting any stockholder proposal which does not meet all of the requirements for
inclusion established by the SEC in effect at the time such proposal is
received.
 
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
 
     The Board of Directors knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
 
     Whether or not you intend to be present at the Annual Meeting, you are
urged to return your proxy card promptly. If you are then present at the Annual
Meeting and wish to vote your shares in person, your original proxy may be
revoked by voting at the Annual Meeting.
 
                                          By Order of the Board of Directors
 

                                          /s/
                                          -----------------------------------
                                          DIANE M. DAVIDHEISER
                                          Secretary
 
Pottstown, Pennsylvania
March 19, 1999
 
   YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
       YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN, DATE AND
               PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE
                         ENCLOSED POSTAGE-PAID ENVELOPE.
 
                                       14